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After many years of saving up for a down payment, you may now be in a position to buy a new house. Before you can do that, there are some things that you need to be aware of when figuring out what you can qualify for, such as negative equity or the decline in the supply of inventory. According to Steve Cook, managing editor of Real Estate Economy Watch, the year began with inventories only 2% above where they were a year ago. To help determine whether or not 2014 is a good time for you to sell your home, you should always contact a local real estate professional to assist you. Additionally, your equity and your credit scores affect what you qualify for when it comes to a mortgage.

First, it is crucial that you understand the meaning of what negative equity is before any action can be taken. According to Investopedia.com, negative equity is when the value of an asset falls below the outstanding balance on the loan used to purchase that asset. Being in negative equity may have some consequences attached; however, it is never too late to fix the problem and move forward from it. A real estate professional is very knowledgeable about the ins and outs of their business and it is their job to assist you with any kind of issue that you may be faced with, including your equity. Agents are valuable resources that can provide you with the most accurate information about how to correct the problems and take the proper action. If you are unsure if the equity of your current home is negative, a Home Equity Calculator could be useful, providing you with the exact value of your home and where you need to go from there.

One of the best ways you can reduce your new monthly mortgage is to improve your credit score before the process actually begins. In addition to paying your bills on time, be sure to reduce your debts (especially those with high-interest rates) and keep unused lines of credit open. All of these strategies can improve your score and allow you to qualify for the best mortgage interest rates available. You can check your credit score on a site like AnnualCreditReport.com a few times a year to keep track of any areas of concern or improvements.

Making the decision to move to a new home and figuring out how to sell your current one can be a challenge. The good news is that you do not have to go through the process alone. There are plenty of real estate agents that are patiently waiting for your call. For additional questions, comments, or concerns, connect with Don Roth at 717-579-2879 or email donroth@earthlink.com

Much of the country is looking at one more very big bite of winter before spring officially begins, but for the residential real estate market, spring is already underway—and new home buyers are sprouting everywhere.

Job creation so far this year is 30% stronger than in the same period last year. Unemployment is close to a low of more than nine years. Wages and income are also starting to pick up to growth levels we haven’t seen since 2009.

And with more money in their bank accounts, consumers are feeling a boost in confidence that leads to big purchases … like homes! This year’s economic growth gives them another reason to buy sooner rather than later because stronger economic growth also means higher interest rates.

January and February saw rates in line with what we saw at the end of 2016. But in the last two weeks, we’ve seen the average rate for a 30-year conforming mortgage increase by almost a quarter of a point. That’s because the market is expecting the Federal Reserve to raise short-term rates when the board of governors meets this week.

Mortgage rates will likely stay close to this level until we hear more about additional rate increases later this year. The expectation is for three increases this year. If economic data continue to show growth in inflation and wages, those three increases could actually become four.

This means that rates will continue to rise—we’re more likely to see a movement of 10-25 basis points in one- to two-week spurts, as new data and new comments from the Fed indicate rate policy changes are imminent. Those spurts will likely be followed by weeks with little change in rates.

The upside of higher rates is that it is getting easier to get a mortgage. The most widely followed measure of mortgage credit access from the Mortgage Bankers Association indicates that access has expanded 6.5% since September.

Arguably the biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully under contract. That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and getting stronger.

We started the year with the lowest inventory of homes available for sale that we’ve ever seen on realtor.com. While we did see inventory grow 2% in February, total inventory was down 11% over last year.

Low inventory and strong supply are leading to inventory moving faster and faster as measured by median days on market. The median number of days on market in February was 90 days, six days less than last year. We also saw 27% of all listings selling in less than 30 days. Last year, we saw that happen in mid- to late March, so this year’s timetable is about three weeks ahead.

The early birds who decided to buy in the winter faced less competition and enjoyed lower rates than we are seeing now. It gets more expensive and more competitive going forward, but the early(ish) buyer, at this point, is still likely to come out on top, when you consider that prices and rates are likely to be much higher later in the year.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.